“All transactions are concluded with the confidence that this framework agreement and all confirmations constitute a single agreement between the parties. and the parties would not otherwise transact. The framework agreement is a document agreed between two parties that establishes standard conditions applicable to all transactions concluded between these parties. Whenever a transaction is concluded, the terms of the framework contract do not have to be renegotiated and apply automatically. This applies only to the 1992 Framework Agreement. The 2002 Framework Agreement abolished the first and second methods. In practice, the first method was very rarely chosen, as its use required the financial institutions concerned to report their gross and non-net risk under the framework agreement. The 2002 framework agreement also replaced the distinction between market listing and loss with a single concept, the “close-out amount”. This is determined in relation to each transaction that has been concluded and is, overall, the profit or loss that would result from the conclusion of an equivalent transaction at the time of early termination. The sum of the amounts in the financial statements and unpaid amounts is called the “early cancellation amount”. This is the net amount to be paid from one party to another in respect of completed transactions. The ISDA Master Agreement, published by the International Swaps and Derivatives Association, is the most widely used master service agreement for OTC derivatives trading internationally. It is part of a documentary framework designed to enable comprehensive and flexible documentation of OTC derivatives. The framework consists of a framework contract, a timetable, confirmations, definition brochures and credit support documentation.
The framework contract is quite long and the negotiation process can be laborious, but once a framework contract is signed, the documentation of future transactions between the parties will be reduced to a brief confirmation of the essential terms of the transaction. (g) 2002 Framework Protocol. The Parties agree that the definitions and provisions set out in Annexes 1 to 16 and Section 6 of the 2002 Framework Protocol, published on 15 July 2003 by the International Swaps and Derivatives Association, Inc., shall be included in and applicable to this Agreement. The Framework Agreement also helps to reduce litigation by providing significant resources that define its terms and declare the intent of the treaty, thus preventing the commencement of disputes and providing a neutral resource for the interpretation of standard contractual terms. Finally, the framework contract significantly helps the parties to manage risks and loans. `(f) Reporting obligations. . . .